Lawrie Out at Siebel

UPDATED: J. Michael Lawrie has resigned as CEO of CRM software maker Siebel , less than a year after he took the reins of the company.

Effective immediately, George Shaheen, the former CEO of consulting and outsourcing company Accenture , formerly known as Andersen Consulting, is stepping into the slot.

“If you look at the company’s results over the last four quarters, they did
not, in general, meet the investors’ expectations, and they did not meet our
internal expectations,” said Thomas Siebel, company founder and chairman of
the board, in a press conference Wednesday.

“The board did a very thorough
review of all operations in the business and performance of the business and
thought it was in the best interests of the shareholders and the best
interests of the company to make the change.”

The news comes shortly after the San Mateo, Calif.-based Siebel announced it would not meet earnings expectations, and at a time when it is looking to gain a foothold in the On Demand software market as more CRM software providers shift to delivering software more as a service instead of a major enterprise installation.

Shaheen, who was also the former top executive at Webvan Group, the defunct online grocery service, is also a member of Siebel’s board of directors.

According to officials, Lawrie and the board of directors mutually agreed he
would resign the position.

J. Michael Lawrie

J. Michael Lawrie
Source: Siebel.com

Lawrie had been CEO of the popular CRM company for less than a year, taking control of the company’s day-to-day operations in May 2004
after Siebel stepped down from the position. He came to the company after
26 years at IBM, where he served as senior vice president and group executive
of sales and distribution before joining Siebel.

Shaheen said the company will focus on long-term customer performance gains
to guide the company going into the future, although he wouldn’t have any
details to share until after he and his management team had identified the
areas to improve operations. He doesn’t expect any temporary disruptions,
though change is needed.

“I don’t believe the company today is in alignment on its business and
business prospects and the size of our infrastructure costs, and I want to
get those into alignment,” Shaheen said. “In the final analysis, this is
about operating performance and customer value; that’s what’s going to help
Siebel Systems improve its financial performance.”

The lack of details from a board member who’s been in place 10 years drew
some sharp questions from investors participating in the conference. One
analyst asked why Lawrie resigned less than a year into his term for not
meeting goals when Shaheen’s own strategy is predicated on long-term
improvements, not short-term gains.

“Everybody can define recovery with a template that they think demonstrates
recovery,” Shaheen said. “I think we’ll know that if this company gets
turned around, in my vernacular, we can generate performance results that
meet your expectations and our commitments over some period of time.”

A long-time software CRM provider, Siebel in the past year has invested
heavily in the hosted model that caters to small- to medium-sized businesses (SMB), called CRM OnDemand. In little more than a year the company has updated
and enhanced
the product
seven times as it tries to eat into the market share enjoyed
by rival Salesforce.com.

Siebel’s financial success, in terms of stock value, has dropped since
Lawrie took over last May. It went from just above $10 per share to just under $9 per share Wednesday. Earlier this month, a group of investors scheduled an open meeting for today to discuss the company’s operations following a disappointing first
quarter 2005.

Investment firms Wachovia, Jefferies & Co. and Needham & Co. downgraded the company after the preliminary first-quarter results were announced.

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